Better Performance Management for Service Companies

It’s been my experience in the business intelligence (BI) and business performance management (BPM) fields—and I’m sure it’s true in other software areas—that one of the most difficult tasks of all is to put theory into practice. Business theories are usually not set in stone and need to be adjusted to reality, or modified to suit specific cases. This is particularly difficult in the measurement of service performance because of the many considerations to be taken into account that involve both quantitative and qualitative criteria.

While conducting research to help a customer with a performance management project, I came across an e-book that addresses the specific issue of measuring service performance. Metrics Maneuvers: A Strategic Approach to Tracking and Analyzing Key Performance Indicators for Service-Centric Organizations [PDF], by Tony Petrucciani, CEO of Single Source Systems, was written under that company’s umbrella and sponsorship; however, this is a valuable book for those organizations looking to measure service performance, which has become increasingly important, as well as for those interested in performance measurement in general.

At 76 pages, Metrics Maneuvers is not a complete manual to business performance management (BPM), but it is a practical guide to applying BPM to the service aspects within a company, especially in terms of designing meaningful key performance indicators (KPIs) to measure service performance, a topic at the top of the requirement list for many organizations today. Customer satisfaction, service level agreement compliance, and other considerations are gaining importance in the modern organization—some organizations base their profit on service delivery: deploying a strong performance management system is an essential tactic for these companies.

A Complete Picture of Service Performance Measurement

The book addresses just one main problem, but comprehensively: what to measure when managing service performance. Whereas financial performance can be measured strictly by the numbers, measuring service means applying quantitative scales to some tough-to-pin-down qualities. Dealing with both service providers and customers means grappling with the complexity of the human component. Metrics Maneuvers provides a snapshot of the fundamentals of service performance, including:

  • how measuring service performance can help organizations to achieve service improvement,

  • the data capture and analysis process that is core for acquiring the necessary knowledge to reviewing goals, bothshort- and long-term, and

  • how to define clear and assertive KPIs that focus on achieving a complete view of the organization and the level of satisfaction it provides to its customers.

The book’s four sections cover the following main topics:

  1. The basics of performance management

  2. The effective use of data

  3. The strategic analysis of data for measuring service performance

  4. The transformation of service operations and its impact on customer experience

The book is organized to follow the implementation of a service performance solution from the planning stages to its deployment. It focuses heavily on the effective use of data and its strategic analysis, which are by far the most important aspects of monitoring service performance to gain the best insight into customer experience. Mr. Petrucciani lays out a good set of rules to be applied in real-world situations, and provides a couple of interesting cases from real life.

Data for Service Providers and Customers

In the modern organization an increasing number of both employees and customers are using data to make more informed decisions. Service managers use the data to enhance their time-to-response and customer satisfaction, and customers to evaluate service as compared against other providers or to establish expectations.
Customers, too, are eager for information and ready to make well-informed purchases. They face the same economic constraints as service providers do and need to be prudent in their investments and protection of capital equipment. Historical data on maintenance costs and repairs helps instill confidence in purchase decisions for upgrading or replacing units. Data also can be used to demonstrate to the customer the overall service reliability, on-time response rates and agreement compliance.

A service performance process works from both ends of the service cycle. Customers need to be able to evaluate their service providers, and service providers need to be able to gather information on how effective their service is and apply their analysis to their internal business processes, which affects the services customers receive and evaluate.

An organization’s software applications should serve as the tools to conduct a complete analysis of service performance as well as to provide customers with data feedback, to generate confidence in their service support. Access to data is paramount, according to Mr. Petrucciani, enabling managers “to set priorities, monitor productivity, make informed decisions and identify strategic opportunities.”

Service Performance Solution Deployment

Understanding the key elements of the service lifecycle is important to consider when deploying a service performance solution. Mr. Petrucciani usefully describes several things to consider for a successful implementation—from executive sponsorship to integration with accounting.

This is a prelude to defining a business’s performance goals, with a good balance of short- (tactical) and long- (strategic) term objectives to keep service performance on track. For this purpose, an organization needs to identify its key players and their roles, along with the relevant data and its role.

The book touches on the important and sensitive issue of choosing the right KPIs and identifies important aspects of these indicators that need to be monitored. Establishing the right KPIs—those that are relevant, clear, and reflect the performance of services provided—will serve up the right food for thought to drive constant improvement. With simple and straight language, Mr. Petrucciani explains some of the hurdles to overcome in defining performance indicators, what their effects are, and why it’s important to align them with corporate strategies:
Service-focused organizations need to dig deep to get a grasp on KPIs that are truly relevant and aligned directly to business goals. Personnel working with developing performance management systems need to keep in mind they are not just looking for data; they are looking for data which can be influenced and looking for influencing factors which lead to improvement aligned with a corporate goal.

Metrics Maneuvers is a worthwhile introduction to the process of defining and monitoring the right KPIs to measure your organization’s service performance, but it may leave the reader wanting more. It is not its aim to discuss the theoretical underpinnings of service performance measurement; rather, it gives real-life examples and solid advice for business professionals who are ready to consider a service performance solution.

I welcome your thoughts; please leave your comment below and I’ll respond the soonest I can.
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